EXECUTION COPY
AMENDMENT No. 2 AND WAIVER dated as of February
13, 2004 (this "Amendment and Waiver"), to the Revolving
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Credit Agreement dated as of January 31, 2003 (as
amended, supplemented or otherwise modified from time to
time, the "Revolving Credit Agreement"), among WKI
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HOLDING COMPANY, INC., a Delaware corporation (the
"Borrower"), the financial institutions party to the
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Revolving Credit Agreement as Lenders (the "Lenders"),
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and JPMORGAN CHASE BANK, as Administrative Agent and
Collateral Agent.
A. The Borrower has requested that the Lenders agree to amend
and/or waive certain provisions of the Revolving Credit Agreement as set forth
herein.
B. The Borrower has also informed the Lenders that an Event of
Default has occurred as a result of the Borrower's failure to (i) liquidate or
dissolve WKI do Brasil Ltda. by December 31, 2003, and (ii) cause clause (b) of
the definition of Collateral and Guarantee Requirement to be satisfied with
respect to such Subsidiary, as required by Section 5.13(e) of the Revolving
Credit Agreement (such Event of Default, the "Specified Event of Default"), and
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has requested that the Lenders grant a limited waiver of the Specified Event of
Default.
C. The Lenders are willing to amend the Revolving Credit Agreement
and waive certain provisions of the Revolving Credit Agreement, in each case on
the terms and subject to the conditions set forth herein.
D. Capitalized terms used and not otherwise defined herein shall
have the meanings assigned thereto in the Revolving Credit Agreement, as amended
hereby.
SECTION 1. Amendments to Section 1.01. (a) The definition of the term
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"Borrowing Base" in Section 1.01 of the Revolving Credit Agreement is hereby
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amended by replacing the proviso in the first sentence of such definition with
the following:
provided that the amounts derived from clauses (b) and (c) shall at
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no time (ii) (A) during the period from July 1, 2004, through and
including October 31, 2004, 175%, (B) during the first three fiscal
quarters of any fiscal year other than fiscal year 2004, 125%, (C)
and at all other times, 100%, in each case of the amount derived
from clause (a) above.
(b) The definition of the term "Consolidated EBITDA" in Section 1.01 of the
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Revolving Credit Agreement is hereby amended by deleting such definition in its
entirety and substituting the following therefor:
"Consolidated EBITDA" means, for any period, Consolidated Net Income
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for such period PLUS (a) without duplication and to the extent deducted in
determining such Consolidated Net Income, the sum of (i) consolidated
interest expense for such period, (ii) consolidated income and franchise
tax expense for such period, (iii) all amounts attributable to
depreciation and amortization for
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such period, including, without limitation, amortization of intangibles
(excluding amortization expense attributable to a prepaid cash item that
was paid in a prior period and included in Consolidated EBITDA for such
prior period), (iv) any noncash and non-recurring charge for such period,
(v) any cash or non-cash charges for such period properly classified as
"extraordinary" under GAAP, including, without limitation, charges
relating to impairment of intangible assets, (vi) fees and expenses
incurred in such period in connection with the Emergence Plan, (vii)
charges for such period attributable to the key employee retention plans
and longterm incentive plans listed on Schedule 1.01(b) or any other such
plan approved by the Required Lenders, provided that the charges
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associated with this clause (vii) shall not exceed $11,800,000 in the
aggregate, (viii) cash and noncash charges for such period that are
directly attributable to the closing of any retail store facilities of the
Borrower, including, without limitation, severance payments relating to
the closing of any headquarters or distribution facilities, (ix) cash and
non-cash charges for such period that are directly related to the 2004
restructuring of the Borrower currently contemplated by the Board of
Directors with the advice of AlixPartners including, without limitation,
severance payments, expenses associated with inventory reductions and
consultants' fees and expenses, and (x) fees and expenses of financial
advisors, accountants and outside counsel incurred in such period in
connection with any asset sale contemplated by the Board of Directors as
of February 6, 2004 and MINUS (b) without duplication and to the extent
included in determining such Consolidated Net Income, any extraordinary
gains for the period, all determined on a consolidated basis in accordance
with GAAP.
SECTION 2. Amendment to Section 5.13. Paragraph (e) of Section 5.13 of
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the Revolving Credit Agreement is hereby amended by deleting the text "December
31, 2003" after the text "dissolved by" and substituting the text "June 30,
2004" in lieu thereof.
SECTION 3. Amendment to Section 6.12. Section 6.12 is hereby amended
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by inserting the following text after the text "any new store": , it being
understood that changing the location of any existing retail store shall not
constitute the opening of a new retail store for the purposes of this Section
6.12
SECTION 4. Amendment to Section 6.14. The table set forth in Section
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6.14 of the Revolving Credit Agreement is hereby amended and restated in its
entirety as follows:
Period Ratio
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January 1, 2004 to March 31, 2004 7.2 : 1.0
April 1, 2004 to June 30, 2004 7.2 : 1.0
July 1, 2004 to September 30, 2004 8.1 : 1.0
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Period Ratio
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October 1, 2004 to December 31, 2004 7.0 : 1.0
January 1, 2005 to March 31, 2005 6.4 : 1.0
April 1, 2005 to June 30, 2005 6.0 : 1.0
July 1, 2005 to September 30, 2005 6.0 : 1.0
October 1, 2005 to December 31, 2005 6.0 : 1.0
January 1, 2006 to March 31, 2006 6.0 : 1.0
April 1, 2006 to June 30, 2006 5.6 : 1.0
July 1, 2006 to September 30, 2006 5.6 : 1.0
October 1, 2006 to December 31, 2006 5.6 : 1.0
January 1, 2007 to March 31, 2007 5.6 : 1.0
April 1, 2007 to June 30, 2007 5.2 : 1.0
July 1, 2007 to September 30, 2007 5.2 : 1.0
SECTION 5. Amendment to Section 6.16. The table set forth in Section
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6.16 of the Revolving Credit Agreement is hereby amended and restated in its
entirety as
follows:
Date Amount
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March 31, 2004 $58,000,000
June 30, 2004 $58,000,000
September 30, 2004 $54,000,000
December 31, 2004 $57,000,000
March 31, 2005 $77,500,000
June 30, 2005 $78,000,000
September 30, 2005 $79,700,000
December 31, 2005 $82,100,000
March 31, 2006 $82,500,000
June 30, 2006 $82,900,000
September 30, 2006 $84,400,000
December 31, 2006 $86,500,000
March 31, 2007 $87,000,000
June 30, 2007 $87,400,000
September 30, 2007 $88,900,000
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SECTION 6. Limited Waiver. The Lenders hereby waive (i) the Specified
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Event of Default and (ii) the notice requirement in Section 5.02(a) of the
Revolving Credit Agreement with respect to such Specified Event of Default.
SECTION 7. Limited Waiver. For the avoidance of doubt, to the extent
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that any change in location of a retail store prior to the date hereof would
constitute a Default under Section 6.12 of the Revolving Credit Agreement, the
Lenders hereby waive (i) compliance with Section 6.12 of the Revolving Credit
Agreement with respect to such Default and (ii) the notice requirement in
Section 5.02(a) of the Revolving Credit Agreement with respect to such Default.
SECTION 8. Representations and Warranties. The Borrower represents and
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warrants to the Administrative Agent and to each of the Lenders that:
(a) This Amendment and Waiver has been duly authorized, executed and
delivered by it and constitutes a legal, valid and binding obligation of such
party hereto, enforceable against it in accordance with its terms.
(b) After giving effect to this Amendment and Waiver, the representations
and warranties set forth in Article III of the Revolving Credit Agreement are
true and correct in all material respects on and as of the date hereof with the
same effect as if made on and as of the date hereof, except to the extent such
representations and warranties expressly relate to an earlier date.
(c) After giving effect to this Amendment and Waiver, no Event of Default
or Default has occurred and is continuing.
SECTION 9. Amendment and Waiver Fee. In consideration of the
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agreements of the Lenders contained in this Amendment and Waiver, the Borrower
agrees to pay the Administrative Agent (payable to the Lenders upon receipt by
the Agent of the signatures required by clause (a)(i) of Section 10), for the
account of each Lender that delivers an executed counterpart of this Amendment
and Waiver prior to 12:00 (noon), New York City time, on February 13, 2004, an
amendment and waiver fee (the "Amendment and Waiver Fee") equal to 0.25% of the
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aggregate amount of the Exposure of such Lender.
SECTION 10. Conditions to Effectiveness. This Amendment and Waiver
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shall become effective as of the date first above written when (a) the
Administrative Agent shall have received (i) counterparts of this Amendment and
Waiver that, when taken together, bear the signatures of the Borrower and the
Lenders having Exposures and unused Commitments representing at least 75% of the
total Exposures and unused Commitments and (ii) the aggregate amount of the
Amendment and Waiver Fee, (b) the representations and warranties set forth in
Section 7 hereof are true and correct and (c) all fees and expenses required to
be paid or reimbursed by the Borrower pursuant hereto, the Revolving Credit
Agreement or otherwise, including all invoiced fees and expenses of counsel to
the Administrative Agent, shall have been paid or reimbursed, as applicable.
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SECTION 11. Revolving Credit Agreement. Except as specifically
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amended hereby, the Revolving Credit Agreement shall continue in full force and
effect in accordance with the provisions thereof as in existence on the date
hereof. After the date hereof, any reference to the Revolving Credit Agreement
shall mean the Revolving Credit Agreement as amended hereby. This Amendment and
Waiver shall be a Loan Document for all purposes.
SECTION 12. APPLICABLE LAW. THIS AMENDMENT SHALL BE
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CONSTRUED IN ACCORDANCE WITH AND GOVERNED BY THE LAW OF THE STATE OF NEW YORK.
SECTION 13. Counterparts. This Amendment and Waiver may be
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executed in two or more counterparts, each of which shall constitute an original
but all of which when taken together shall constitute but one agreement.
Delivery of an executed signature page to this Amendment and Waiver by facsimile
transmission shall be effective as delivery of a manually signed counterpart of
this Amendment and Waiver.
SECTION 14. Expenses. The Borrower agrees to reimburse the
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Administrative Agent for its out-of-pocket expenses in connection with this
Amendment and Waiver, including the reasonable fees, charges and disbursements
of Cravath, Swaine & Xxxxx LLP, counsel for the Administrative Agent.
SECTION 15. Headings. The headings of this Amendment and Waiver
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are for purposes of reference only and shall not limit or otherwise affect the
meaning hereof.
IN WITNESS WHEREOF, the parties hereto have caused this Amendment and
Waiver to be duty executed by their respective authorized officers as of the day
and year first written above.
WKI HOLDING COMPANY, INC.,
by: /s/ Xxxx Xxxxxxxx
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Name: Xxxx Xxxxxxxx
Title: VP and Treasurer
JPMORGAN CHASE BANK, individually
and as Administrative Agent, Collateral
Agent and Issuing Bank,
by:
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Name:
Title:
IN WITNESS WHEREOF, the parties hereto have caused this Amendment and
Waiver to be duty executed by their respective authorized officers as of the day
and year first written above.
WKI HOLDING COMPANY, INC.,
by:
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Name:
Title:
JPMORGAN CHASE BANK, individually
and as Administrative Agent, Collateral
Agent and Issuing Bank,
by: /s/ Xxxxxxxx Xxxx
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Name: Xxxxxxxx Xxxx
Title: Vice President
SIGNATURE PAGE TO
AMENDMENT TO REVOLVING
CREDIT AGREEMENT
To Approve the Amendment and Waiver:
Name of Institution GENERAL ELECTRIC CAPITAL CORPORATION
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by /s/ Xxxxxxx Xxxxx
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Name: Xxxxxxx Xxxxx
Title: Duly Authorized Signatory
SIGNATURE PAGE TO
AMENDMENT TO REVOLVING
CREDIT AGREEMENT
To Approve the Amendment and Waiver:
Name of Institution Xxxxx Fargo Foothill
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by /s/ Xxxxxx Xxx
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Name: Xxxxxx Xxx
Title: AVP
